MILAN — The upward trend in coffee futures markets continues unabated. Yesterday, Tuesday 26th November, further gains were recorded: New York gained 405 points to reach a new high of 308.85 cents. Last year, at this time, the main contract barely reached the 170 cents mark. London, in turn, coffee futures closed up $65, at $5,175: more than twice as much as a year ago, although still far below the all-time highs of late September. The fundamental picture remains fragile.
Of concern is the situation in Brazil, where the harvest prospects for Arabica are not promising, despite last month’s good flowering.
In Vietnam, the harvest is proceeding at a good pace. This year’s production potential was heavily penalised by last spring’s drought and high temperatures.
However, insiders point out that the high prices have stimulated farming husbandry, offsetting, at least in part, the damage caused by the weather. The first batches of the new harvest will reach the markets in the coming weeks.
Producers are well capitalised and in no hurry to sell. Domestic prices are now approaching 120,000 dong/kg ($4.7).
In the first half of November, Vietnam’s exports were only 20,933 tonnes (-44.8%), but generated sales of $121.8 million: 1.8% more than in the same period last year.
In the first 10½ months of the calendar year, exports totalled 1.17 million tonnes, or 19.5 million bags, earning $4.7 billion, down 13.5% in volume but up 38.1% in value compared to the same period last year.
According to the Ministry of Agriculture and Rural Development, the average export price in the first 10 months of the year was $3,981 per tonne, up 57% on the same period last year.
Germany, Italy and Spain were the top three markets, accounting for 11.2%, 8.2% and 7.9% respectively.
According to the Vietnam Coffee and Cocoa Association (Vicofa), the country exported a total of 1.46 million tonnes of coffee (24.33 million bags) in the 2023/24 coffee year (October-September), 12.1% less than in 2022/23.
However, the strong recovery in prices has pushed revenues to a record $5.43 billion, up almost a third (+33.1%) on the previous year.
The outlook for Indonesia deteriorated further. In a new report, the US Department of Agriculture (USDA) cut its 2023/24 production estimate to just 7.65 million bags, including 6.3 million bags of Robusta and 1.35 million bags of Arabica, citing an even worse weather impact than originally expected.
In 2024/25, production will increase to 10 million bags, of which 8.6 million bags of Robusta and 1.4 million bags of Arabica.
In the previous report, USDA had forecast a crop of 10.9 million bags. This lowered estimate is due to a smaller-than-expected recovery in Robusta production.
Exports are also revised downward, from 5.358 million in 2023/24 to 6.31 million in 2024/25, still well below historical averages.
